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March 2018 Trends

Published on: 2018-03-11 11:34:32     355 times read    0  Comments
Loyalty Programmes : Offering Customers More

A look at how Nepali businesses are focused on a customer benefiting strategy to reinforce their brands and build buyer loyalty.

--BY  MUNA SUNUWAR

In today’s highly competitive environment, businesses strive to build their brands and expand services by establishing strong customer relationships. Customer loyalty programmes have become an important and structured marketing strategy for businesses the world over. Nepali companies have also incorporated loyalty programmes in their marketing strategies to attract and retain customers. 

A better service is directly proportional to customer loyalty. When services meet customer expectations, people tend to use such services on a regular basis. While it is also true that people prefer a specific brand when they are presented with benefits that other competing brands lack.    

The buying habit of consumers is directly affected by what the brands have to offer. It is normal for consumers to look for deals, discount, loyalty and rewards programmes before choosing the brands. The quality of after sales service plays a vital role in the expansion of brand presence in the market. Nevertheless, extra benefits that may come in the form of cash incentives, free services or any other advantageous perk is one of the driving factors for customers picking a certain brand. Businesses like retail, hospitality, banking or any other service-oriented sector can be enhanced with schemes that engage customers. 

Loyalty schemes go beyond discounts and privileges for regular customers. It is about maintaining a good relationship between two parties who benefit equally. “We invite our regular customers through phone calls and SMS to attend VIP events,” says Sanjay Rajbhandari, deputy general manager of CG Electronics, the authorised distributor of LG in Nepal.

The company has been practicing loyalty schemes as a tool for customer engagement. “Regular customers are invited to special programmes organised on different occasions such as Dashain, Tihar, Christmas and Valentine’s Day where we demonstrate features and functionality of our newly launched products,” states Rajbhandari, adding, “We also offer special discounts for our regular customers on LG products.” 

Loyalty programmes, which are also dedicated personal customer services for companies, makes customers feel privileged which becomes the reason for continuous loyalty towards the brands, thus maximising the frequency of transactions and the addition of referral customers. Meanwhile, in the case of approaching new brands and service providers, customers evaluate benefits that the new brands have to offer. 

The number of customers can be small or big, but the ultimate goal of loyalty programmes is to make customers come back. Bhim Raj Rai, media manager at Yeti Airlines says, “There are over 70,000 Sky Club members of our airlines who are rewarded with free tickets on reaching the mileage points on the airfare of flights of various sectors across the country.” According to him, the loyalty scheme of Yeti Airlines also includes discounts to its passengers at various restaurants, hotels and resorts, fitness centres, beauty parlours and hospitals. Loyalty programmes are a good deal for customers and in exchange they investment their time and money in a particular brand. “Other benefits provided by the airlines include extra baggage allowance, cancellation and refund concession. Every month, we acknowledge the top 10 flyers of the month with attractive gift hampers,” he adds. 

Hospitality is another sector in Nepal where loyalty programmes are practiced to a large extent. “We focus on the corporate, brand awareness programmes, product marketing, field marketing and customer marketing in the loyalty programmes,” informs Anu Parajuli, assistant manager of sales and marketing at Radisson Hotel. According to her, the guests of the hotel are given more than perceived value which makes them feel cared for and prioritised. Radisson Hotel’s loyalty scheme covers discounts on all facilities introduced by the hospitality company, especially in room tariffs and food and beverage bills.

Similarly, the super market chain Big Mart has deployed a loyalty programme as an effective approach to retain customers. “We believe in quality products and service and have been spending 10 percent of our total sales in the programme,” says Binod Kumar Shrestha, store manager at Big Mart. He adds, “70 percent of our customers are the members of the loyalty programme who are provided with Big Mart discount cards.” The programme has become an important strategy for Big Mart to boost the frequency of customers at its stores. “Customers with a monthly spending outlay of Rs 5,001, Rs 12,000 and Rs 30,000 in cash get two, four and six percent discounts respectively,” mentions Shrestha.  Likewise, Bhat-Bhateni Supermarket and Departmental Store also has been offering loyalty card to its customers. A point is accumulated in Bhat-Bhateni Club Card for every purchase worth Rs 500 which is equivalent to at least Rs 6.5 of the shopping voucher. 

The remittance service provider IME Remit has the IME Customer Card to make its service delivery swift, simple and time-saving for its customers. IME’s customers are provided with cards, embedded with a customer’s details, for remittance transactions through the company. With such cards, customers are spared the hassle of carrying original identification documents. “The programme has been launched to systematise the transaction making the service fast, simple and time-saving at any IME Remit outlet. Besides, bonus points are accumulated every time customers make a transaction through the card and can redeem prizes when a certain amount of bonus points is accumulated,” says Raju Paudel, public relation head at IME Group. According to Paudel, IME Remit has already distributed around 600,000 customer cards in the market.  

In the meantime, the electronic payment service operator eSewa also has been receiving positive user feedback for its loyalty programme. According to the company, there has been a rise in the number of users who have received different types of prizes against the accumulated reward points. “The rewarding system has become an essential tool to promote and brand our service,” opines Yakrid Shrestha, officer of the merchant integration and operation department at eSewa. “Customers nowadays seek extra benefits from their service providers. Understanding this, we have presented them with cash back offers and discounts in collaboration with the partner companies,” explains Shrestha.

Shrestha claims that this tactic has encouraged users to make frequent transactions through eSewa. He says, “The eSewa reward point is a value addition in our service and is applicable in almost 75 percent of our services.” Based on the success of the scheme, the company plans to continue the scheme for as long as possible. 

Medium and small sized enterprises are also integrating loyalty programmes in their marketing strategy. Be it food companies, clothing lines or educational institutions, customer loyalty has become crucial for their survival in the long run. Identifying the trend, an app called Chitooo claims that it has taken loyalty/reward schemes to another level empowering end users to become promoters for businesses. According to Prachet Sharma, CTO at Chitooo, the app adopts a simple peer-to-peer solution to connect business owners with users and integrates it with Facebook which is in fact the largest database in the world. 

Sharma says that the app eliminates the need to spend money on promotion and advertising for small and medium enterprises. “With Chitooo, businesses can focus on their customers and let them generate some organic visibility and growth through social sharing and check-ins,” shares Sharma.  

Sharma thinks that the concept of loyalty programmes is not just to retain customers in one specific area but to make them spend regularly on different products and services businesses have to offer. “If such programmes are executed with the right methods, the business potential can be huge. Different campaigns can be run based on the sectors and profile of the business,” he mentions. 

According to Sharma, Chitoo users have liked the app’s concept and are reaping the benefits of Chitooo deals like Rs 399 for a 14 inch pizza, buy one get one free scheme on coffee, 40-50 percent discount on IELTS classes, among others. “By offering privileges to the customers, we are creating a community where like-minded people are rewarded for their continuous dedication towards a company or a particular brand,” he says.


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